Operation Badland -- How Individualism And Government Support Fuel Finland's App Miracle

Finland has a population of 5 million people and 150 game companies; the wild success of Rovio and Supercell has triggered a mobile app gold rush. One recent game, “Badland”, offers a glimpse at how the Finnish hit machine operates. A two-man company called Frogmind won the AppleApple Design Award with its debut app in June and has now agreed to reveal details about its creation and sales numbers.

Unusually, “Badland” was priced at $4 to highlight its premium quality. Frogmind wanted to create a pure gaming experience without any text or in-app purchase steps that would distract from an immersive experience. “Badland” was designed from the beginning to offer more diversity than regular runner/flyer games. An important secondary goal was to achieve console-quality graphics and audio that would improve odds of gaining the coveted Featured App blessing from Apple.

Frogmind did not have money for a marketing campaign, so the entire launch strategy was built on producing a YouTube video that would resonate with gaming media. Towards that goal, “Badland” was constructed to combine a one-touch control scheme with elaborate, bizarre dreamland graphics scrolling languidly behind the action. It’s an unusual combination in an era of stripped-down graphics.

The YouTube clip debuted in October 2012. Touch Arcade and Pocket Gamer featured the game on their sites. Edge, Joystiq and Eurogamer followed. In less than 24 hours, Apple emailed Frogmind. Six months later, “Badland” debuted as a featured app on App Store. It had amassed 100,000 viewers for its YouTube trailers. Even with the $4 download price, it hit 15,000 daily download peak in 48 hours, demonstrating the value of Apple’s direct backing. The app grossed its first $100,000 within five days in early April. The counterintuitive move of going against the free download trend paid off.

Badland Download Volume

The following weeks showed just how hard it is out there for a new premium app. Despite the early hoopla, download volumes soon dwindled to below 1,000 per day. Frogmind’s strategy with dealing with this is to deliver monthly updates that are substantial enough to make a real impact – at the end of May, the first expansion pack boosted unit sales back to around 4,000 per day.

In early May, Badland won the Apple Design Award and sales spiked close to 7,000 per day.

The success of the game is mostly a result of a well-executed and highly original product concept of its creators; it demonstrates how indie developers can still compete against big app houses like Disney or Electronic Arts. They both have 5 years of game development experience at Red Lynx, one of Finland’s second-tier game houses. But government support also played an important part.

Finland has a long, successful history of effective and beneficial government role in fostering a vibrant game industry. Over the past 15 years, the state has spent roughly 60 M euros in supporting small game start-ups. That support helped save an upstart called Rovio a few years ago when the company was struggling to survive in its pre-Angry Birds days.

For Frogmind, the government support meant a 15,000 euro ELY grant in 2012 combined with a chance to move to a state-funded business incubator at Aalto University Start-up Center. After the success of Badland, Frogmind is receiving a development grant from TEKES in 2013 – this round must be matched by an equal investment by the company itself. The Finnish system runs on small, tightly controlled grants.

This can be viewed as soft socialism to support a mobile app industry. It works. The system has spawned a long list of winners stretching from Rovio to Supercell to Frogmind. Supercell alone is likely to pay a 2013 Finnish tax bill that will cover the entire 15-year cost of government support for the game industry. A small company like Frogmind can thrive creating niche games even with tiny early funding – the sort that traditional VC’s would be unlikely to deliver. Some small Finnish boutiques later grow into substantial companies. But this delicate process only works with a multi-decade, effective funding mechanism specifically tailored to support the low operating cost, bespoke model that fits the app industry so well.

Many American VC people scoff at government funding and find it an absurd anachronism at best. But in countries lacking the scale and sophistication of the US financial infrastructure, state support is vital. When it is implemented judiciously, the results can be fairly dazzling. Finland’s gaming industry revenues are now projected to hit $1 Billion in 2013 – that would be equivalent to a $60 B industry in a country the size of America.

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